Expert Legal Advice from Disability Insurance Attorney Ethan Abramowitz - RR Ep 15

What happens when a physician files a disability insurance claim? How do own-occupation disability insurance policies, residual disability benefits, and group disability insurance contracts actually perform during a claim?

In this episode of The Responsible Resident, Amber Stitt sits down with disability insurance attorney Ethan Abramowitz to discuss the real-world challenges physicians face during the disability insurance claims process. 

Drawing from years of experience representing physicians, dentists, and highly compensated professionals, Ethan shares valuable insights into disability insurance claims, policy definitions, partial disability benefits, residual disability riders, future increase options (FIOs), and the critical differences between individual disability insurance and employer-provided group disability insurance.

This episode covers:

• True own-occupation disability insurance explained
• Individual vs group disability insurance benefits
• Common disability insurance claim mistakes
• Residual and partial disability claims for physicians
• Future Increase Options (FIOs) and protecting future insurability
• The most common causes of physician disability claims
• Why policy design matters years before a claim occurs
• How attorneys evaluate disability insurance contracts during claims

If you're a physician, resident, fellow, dentist, or medical professional, this conversation provides practical guidance on protecting your income, understanding disability insurance contracts, and preparing for the unexpected.

Based on the discussion, this episode is particularly strong for physicians searching for information on own-occupation disability insurance, disability insurance claims, residual disability benefits, group LTD limitations, and physician income protection strategies.

🔗 To connect with Ethan Abramowitz:

📲 LinkedIn: https://www.linkedin.com/in/ethanfabramowitz

📲 Website: https://www.seltzerlegal.com/attorneys/ethan-abramowitz

📲 Phone: (215) 735-4222

📲 Email: ethan@seltzerlegal.com

#theresponsibleresidentpodcast, #amberstitt, #ethanabramowitz, #disabilityinsurance, #disabilityinsurancelaw,

📻 Thank you for tuning in to The Responsible Resident!

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StittStrategies.com/Blueprint

If you would like a free quote, please contact us at: 

mddisabilityquotes.com/responsible-resident

Amber Stitt is a disability insurance specialist with over 15 years of experience helping physicians protect their income and make informed financial decisions. 

As the host of The Responsible Resident, she brings a structured, education-first approach to topics like disability insurance, underwriting, and income protection, areas often overlooked during medical training. 

🔗 Connect with host, Amber Stitt, on Social Media:

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📲 Be sure to visit the Stitt Strategies website:

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🎬 And remember, let's take action today!!!

Transcript

Amber Stitt [00:00:00]:
Welcome to The Responsible Resident. I'm Amber Stitt. This podcast takes a common sense approach to financial decisions for physicians, breaking down complex topics into something clear, practical, and usable. Because you shouldn't have to have a finance degree to build financial freedom.

Amber Stitt [00:00:16]:
I am your host, Amber Stitt and today we welcome Ethan Abramowitz, an associate at Seltzer and Associates, and we are so excited to have him here. Given his extensive background in the insurance claims process, including pre-suit investigations, advising claims specialists, and counseling insurance companies' in-house counsel. Ethan has litigated a wide variety of insurance liability and class action matters, along with conducting insurance fraud investigations, including multiple projects with the special investigation units of the nation's largest insurance companies. So let's just say Ethan represents impaired professionals, which means he lives and breathes insurance contracts, specifically long-term disability and employment benefits. That being said, I thought he'd be a perfect guest for my audience because most of you are medical professionals and you ask us about own occupation contracts while you're shopping and we usually cover it again when we're doing our reviews. So that being said, I thought you're going to bring some clarity to the audience on many of these topics because you're seeing this every day with your clients. So I really appreciate you being here, Ethan.

Ethan Abramowitz [00:01:24]:
Amber, thank you for the introduction and it's a pleasure. As you mentioned, I started my career working as an insurance defense attorney representing a lot of the nation's larger insurance companies down in Florida. And with that, working hand-in-hand with claims departments handling disputes investigations, and then transitioned the better part of a decade ago, to representing highly skilled professionals, primarily physicians and dentists, with individual and group disability claims. And in that capacity, I've worked with my clients really through every phase of the claims process, from analyzing and assessing one's coverage prior to submitting a claim to assess their ability to move forward with the claim, to helping clients navigate partial and total disability claims. Obviously, with physicians with partial disability claims, there's always the question of med mal culpability. Is it safe for them to practice both for themselves as opposed to risk to patient safety, keeping those clients in practice as long as medically appropriate and then transitioning if necessary to total disability through dealing with claim denial and terminations and appeals and litigation. Over the years, really, I've seen the good, the bad, and the ugly. These are complex products like every other type of insurance product. You want to have the best, what we refer to as "Cadillac policies" in the industry, but they're complicated and with every insurance policy, it's what you have at the time of claim that matters.

Ethan Abramowitz [00:02:45]:
And no one wants to be in a situation where they think they have a Cadillac policy, and then 10, 15 years later when it's the time that they have to go out on disability, they come to realize that what they subjectively believed was their coverage, is in fact something that is wholly insufficient and truly jeopardizes their financial security and the plans that they had. And unfortunately, that's something we see quite a bit on my end. Like I said, I'm on the back end here, so when someone's coming to me, the time to analyze what they can do as far as improving coverage has long passed. So taking time to speak with you and your audience to make sure that physicians and the professionals you work with understand the importance of these products, the complexity of these products, and really some tools to understand maybe what they have and why it might be a good idea to sit down with you and your team to make sure the coverage that they subjectively believe they have lines up with what you and your team believe is what best suits their financial needs and financial protection.

Amber Stitt [00:03:43]:
Well, I think what'll be great is when you're sharing how this actually works it will be helpful because we actually have a lot of medical students and first year residents now purchasing very early. So the good news is they're learning about this early. But like you're saying, what if they're set up with the wrong structure and then 10 years later it's really hard to fix that, especially when there's medical history and the products would be a lot more expensive because they're older. So I think this, again, will bring some clarity. We get a lot of questions at MD Disability Quotes, my business partner Scott and I, that, you know Scott, we often get questions about own occupation in general when they're residents, but then they become attendings and we start looking at income changes and maybe a bigger policy because their income needs, or family needs needs have changed. And then there's group insurance at work and there's that modified own occupation. A lot of times our clients will say, "Hey, I'm just going to potentially go with the group plan.

Amber Stitt [00:04:36]:
I have this at work, so I don't need that much more on the own occupation side." And so I think with you speaking to us today, I think that'll help them see the differences and how that can really impact their lives. So we could start with you explaining, what are people misunderstanding about these contracts often, and we could kind of kick it off there.

Ethan Abramowitz [00:04:55]:
I'll start with saying the beauty of the individual disability product is that the physician, the resident, sits down with someone like you or Scott, your team, and has the ability to make sure they have the best available coverage. And we'll talk about it later on. But when you're talking about this, a common misconception with the clients I work with is true own occupation. That definition, which in general terms, and we'll talk in generalities here, is if you have, due to injury or sickness, the inability to perform the material and substantial important duties of your occupation, then regardless of your ability to do anything else, you get 100% of your disability benefit and it doesn't have a negative effect on your ability to do something else. In my world, I've worked with anesthesiologists, surgeons, medical specialists, who for one reason or another have to stop. I think what's unique about the medical profession is something as simple as CMC joint arthritis at the base of the thumb. If they can't hold, manipulate, use the appropriate manual dexterity, grip strength to do procedures, that's going to take them out of their medical specialty. It's not going to affect our ability to do our jobs on a day-in, day-out basis.

Ethan Abramowitz [00:06:07]:
But that little issue that arthritis at the base of the thumb has rendered so many of my clients totally disabled from working in their medical specialty. It hasn't stopped them from pursuing other meaningful career paths. Physicians go through four years of college, medical school, residency, additional training down the road, whether it's a fellowship or something else. So they have this vast knowledge base, these skills and just extensive resources that are highly desirable in other fields, whether it's transitioning into a less physically demanded medical specialty, or consulting, or academics, what have you. With the true own occupation policy, they get 100% of the disability benefit and 100% of the income from the other occupation. And some people may look at that and say, "Well, if I can do something else, why do I really need the disability insurance?" And try and do a cost benefit analysis and get lost in really what's important, which is your income is designed to grow over time. When you start out as a young physician, you're looking at, "Where's my income going to be at age 60, 65 or 50s through that time period?" So if someone loses the ability to use their hand, or they have spinal issues or something else, and their monthly benefit is $10,000 a month, the question then becomes, can they substantiate their anticipated quality of life into the future and is that income today supplemented with what other occupation they may transfer into, is that going to keep them on the same earnings trajectory that they were hoping to be? But also whether or not with the benefit they have, is that enough to maintain their current quality of life and financial security? And that's really what the true own occupation definition is designed to protect that specific income stream, that occupation that allows you to make your living today. And the policey grows with you.

Ethan Abramowitz [00:08:04]:
So the definition of own occupation is your occupation at the time of disability. So if someone is maybe in a...

Amber Stitt [00:08:13]:
For example, like a resident.

Ethan Abramowitz [00:08:15]:
Yeah, if they're a resident but they transition from a family medicine or internal medicine track to surgery down the road, just because you took a policy out 10 years ago while you were on track A, if you become a surgeon down the road, that policy stays with you and it's that occupation. So they're very specialized, they're very unique, and they're very important, especially for physicians and dentists where minor issues are major issues for them.

Amber Stitt [00:08:44]:
Yeah, what's nice about that rider, is that you start young, most of our clients that we meet are younger, but as you subspecialize, you don't have to self-report these income changes or specialties that go more interventional, more surgical. That's the benefit, too, is that price, that savings there, but also locking in the best health and so...

Ethan Abramowitz [00:09:04]:
And as you mentioned, the other thing is that as their income grows, they can structure a policy with increase options. So someone can buy a policy today that has a monthly benefit of say $5,000 a month with increase options up to whatever the enrollment limit by the provider is on your end. But as their income grows without the need for additional medical underwriting into the future, it's pure financially based growth. So it doesn't matter if five years down the road after I had the policy issued, that I subsequently develop back issues, that's not going to prevent me from increasing my coverage as far as monthly benefit, it would prevent me from potentially getting a new policy with medical underwriting at that point later on in my career.

Amber Stitt [00:09:49]:
Yeah, I actually had a female who had breast cancer and she was in the middle of her anniversary for an FIO increase the increase option. And we paused for a minute because she wasn't disabled. She had breast cancer. She's having surgery using PTO and time-off that she had at work to have the surgery. We were able to complete an actual increase option during this whole process as she was recovering because she wasn't disabled, she just had cancer and luckily she got rid of it. So I call it the health shield almost, the health shield from future issues.

Ethan Abramowitz [00:10:23]:
And it is something that those options are purely based that there's typically 3 questions which is, "Have you been sick? Have you been out of work for more than 90 days? And have you filed a disability plan?" So if you don't meet the policy definition of disability, then there's nothing preventing you from executing that increase option. And we have had clients in the past that maybe have executed an increase option that occurred during a period of disability. And while it didn't trigger while they were on that claim, that person recovered, went back to work and was no longer disabled under the policy that coverage was then in effect should they ever have to step out again in the future. So it's again these policies are detailed that there's a lot of niche in them, but they're very beneficial and they're set up to help doctors and protect their financial security. I think one of the questions I think we both see is why are these products important? Why do I need disability insurance? And insurance is always a problematic topic. I know, I just had to renew my auto and homeowners policy. I have them bundled and as a former insurance defense attorney I went through it line by line with my broker and made sure that I had what I felt was needed and we bounced things off each other. But we had to have homeowners, we had to have auto.

Ethan Abramowitz [00:11:38]:
If you have a family and young children and you're early in your career and you haven't self-insured life insurance, these are no brainers, what I refer to. But when we talk about disability, it's kind of like the topic nobody really wants to discuss. Death is a certainty. So it's an easy topic to say life insurance is important, because at some point you're going to die. People don't understand how common disability is. And just looking at Social Security statistics, 25% of professionals right now will become disabled prior to normal Social Security retirement age. That's 25%. That's the Social Security definition which is injury that prevents you from engaging any gainful occupation.

Ethan Abramowitz [00:12:21]:
Those statistics don't address medical specialty, being an attorney, being a financial advisor. So it's looking at that more stringent definition of any gainful occupation, and that's 25%. The other thing those statistics don't talk about is residual, or partial disability.

Amber Stitt [00:12:41]:
Yeah, that's the most confusing topic for my clients is, "What is residual?" Because they don't understand what the word residual means. It's a component of the partial disability, but, yeah, that'd be a great place to continue.

Ethan Abramowitz [00:12:53]:
So residual, partial, they're interchangeable depending on the policy. But what it is is if you have an injury or sickness that limits your ability, whether it's time or duties, to work at the capacity you were previously. So if you can't do one or more of the material and substantial duties of your occupation, or you're caused to reduce the number of hours that you work or the number of procedures you're able to perform in a given day and you suffer a qualifying loss of income, then a proportionate benefit is triggered on the policy. And it varies company by company, and details are important. We can spend some more time on that a little later. But what's important to know is, and I'll touch on it in a second, is that more often than not when a client comes into my office, unless it's an injury, or a sudden event like a heart attack or stroke, most of the conditions I see are degenerative in nature. Arthritis, musculoskeletal, neurological. So they occur over time and they gradually will degenerate, and the productivity and functional capacity will decline over time.

Ethan Abramowitz [00:13:58]:
And as that decline happens, at a certain point, your income will decrease because you're no longer able to produce the RBUs or CPT codes that are set up for your comp structure. And these benefits are designed that if you're cutting back and you're suffering a loss of income, that the policy will then pay a proportionate benefit. So if you have a simple map, a 50% loss of income, that the policy will then pay a 50% benefit. Now, what's important on your end when talking to your clients is when they're assessing what their coverage is that the 50% loss of income, let's say you're making, simple math, $120,000 a year, and you've got a 50% loss of income. So you're making $10,000 a month. Now you're only making $5,000 a month. If you've got a $5,000 a month policy and you have a 50% loss, that policy is only going to pay you $2,500 a month, because that's a proportion loss. Now, you take the $2,500 from the disability benefit and the $5,000 from your earned income, that's now a $7,500 a month combined monthly income that you're receiving.

Ethan Abramowitz [00:15:06]:
There's still a $2,500 deficit. And that's something where strong planning and working for you to make sure that they have the recommended coverage will help bridge that gap and avoid financial issues.

Amber Stitt [00:15:21]:
I have a question for you and hopefully it's not going to throw you for a loop, but I had somebody request from me a lower benefit, but to add on catastrophic coverage. In my experience, I would prefer to have people have a higher base benefit for that higher multiplying effect. Based upon everything you're saying, is that good advice to give them to say, "I'd prefer to forego a CAT rider, if it's a cost thing and go bigger in the base." What do you think about that?

Ethan Abramowitz [00:15:49]:
I think that's sound advice and I'll go through the leading causes of disability with you in a second. But think about it this way, the catastrophic is an add-on. So if you have a high base benefit and supplement that with the catastrophic loss, if you do have a, what qualifies as a catastrophic medical condition, you're still getting the base plus the catastrophic rider on top of that versus if you don't have a catastrophic medical condition, you've set your monthly benefit at a reduced rate, in essence anticipating on only having to rely on a catastrophic loss and thereby in essence missing out on the leading causes of disability.

Amber Stitt [00:16:32]:
Right.

Ethan Abramowitz [00:16:33]:
I think when we talk about it, it's a good segue, is that the base benefit should be 60% to 70% of your gross monthly earnings and that's to cover tax liability and that's to make sure that you're able to maintain your current quality of life without having to dip into your savings and start jeopardizing your financial security in the future. Oftentimes people don't understand the financial consequences of being underinsured. And that's this situation. I'm fearing that the potential client you were talking with may be missing, which is Social Security statistics show that 38% of disabled professionals will struggle to pay their normal living expenses within 3 months of losing their regular income stream.

Amber Stitt [00:17:16]:
3 months, yeah.

Ethan Abramowitz [00:17:18]:
And that's normally why we see the elimination period set at 3 months. But I think what's more troubling is that 65% of disabled professionals will be unable to pay their normal living expenses within a year of becoming disabled. So the question then becomes to the person you were talking to earlier, which is, "Can you pay your normal living expenses relying on the base disability benefit versus having to rely on the catastrophic disability benefit?" And often what happens when I see clients on my end that haven't done a deep dive into the analysis of that 60% to 70% of coverages. It's a horror story. I had a client come in the other day making north of $500,000 a year. He had a $10,000 a month individual disability benefit. He also had a group provided long-term disability benefit that was $10,000, as well. That benefit, the group policy was subject to a 24 month limitation for own occupation coverage. It was subject to tax liability and deductible sources of income.

Ethan Abramowitz [00:18:16]:
And the doc wrote to me and said, "Ethan, I can't afford to be disabled, I can't maintain, I'm going to have to sell my house, I'm going to have to dive into my savings, my 401k." And those are conversations that you never want to have.

Amber Stitt [00:18:29]:
Ethan, you're talking about the 24 month modified own occupation. People see own occupation, they think they're safe, but is that what you're talking about? And then after 24 months...

Ethan Abramowitz [00:18:39]:
One of the common misconceptions with group long-term disability claims, the employer provided plans is when we talk about own occupation coverage, it's an umbrella. And under that umbrella there's true own occupation policies, which typically are only provided in the individual disability product line, guaranteed standard issue product line and association plans. Now each of those other two guaranteed standard issue and association policies have other issues within them that in my personal opinion, potentially weaken the coverage compared to a true own occupation individual disability policy. But more often than not, the general definition in a group long-term disability plan is something along the lines of, "Due to injury or sickness or you are unable to perform the material or substantial duties of your occupation and have a 20% loss of earnings..." And then what we'll often see is that after 24 months of disability, the definition is then, "Due to injury or sickness you are unable to perform material or subastantial duties of any gainful occupation based on education, training, experience..." And policies vary and there's different quantifications for "any gainful occupation". But if the policy doesn't have that, they then throw it back at a Social Security definition which is of any gainful occupation. It varies year to year, but if you can generate roughly $1,100 to $1,300 a month in any occupation, you no longer meet the policy definition of disability and your claim terminates. So the problem I often see on my end is that doctors are then in a position of, "Well, I shouldn't be practicing.

Ethan Abramowitz [00:20:14]:
My treatment team has advised me that I'm a risk to my safety and wellbeing as well as patient safety." And we've seen doctors put their financial security ahead of their health and wellbeing and patient safety and it's an awful situation. I have one client, an old client, neurosurgeon, who was told by his neurologist, he had a hand tremor, non-Parkinson's, to stop practicing 6 months before he walked in my door.

Amber Stitt [00:20:37]:
Wow. So he was still practicing prior to coming through?

Ethan Abramowitz [00:20:42]:
Prior to coming, he was advised to stop and he wanted to pursue a partial disability plan. And I'm going through his medical records. I'm speaking to his neurologist. It took another 4 months for us to finally sit him down and say, "Listen, this is what your medical condition is. We understand that you think you can safely practice. Your doctor is telling us that you can't. You're modifying how you're practicing. If something goes wrong, you now suffer potential criminal and civil liability at a heightened risk.

Ethan Abramowitz [00:21:11]:
Your record saying you've acknowledged that you're modifying and changing how you're doing things," Plus the sensitive nature of the work this doctor was doing and he eventually stepped down. I think that's one of the hardest things for any professional, but specifically doctors and dentists is acknowledging that maybe it's no longer safe for them to work. And that's a conversation we can get into later, but nobody wants to admit they have a medical condition that's affecting them. Nobody wants to acknowledge that they may become disabled down the road. Listen, my father suffered a catastrophic stroke at 73. I've worked with and represented former friends and colleagues, just from past life, I can go through lists of at least 5 people that I have close personal, professional relationships with that have had to go out on disability.

Ethan Abramowitz [00:21:54]:
That's just from my profession that I know, let alone.

Amber Stitt [00:21:58]:
And we're talking attorneys.

Ethan Abramowitz [00:22:00]:
So again, it's a tough concept for people to process. But the importance of these products, because of the prevalence and the likelihood, again, 25% chance that maybe something that people look at and say, "Well, that's a low probability." But when you sit in a room with 4 other people and you're looking around and saying, "One of you probably going to have to stop."

Amber Stitt [00:22:21]:
Which one of you, Right.

Ethan Abramowitz [00:22:23]:
It changes things.

Amber Stitt [00:22:24]:
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Amber Stitt [00:23:02]:
You can download the FREE Medical Professionals Blueprint at: StittStrategies.com/Blueprint.

Amber Stitt [00:23:13]:
I think a lot of physicians that we meet might be looking at generating some side income today. So let's just say rental income would not be gainful employment. Would you agree with that?

Ethan Abramowitz [00:23:25]:
So the way we look at your occupation, the definition is typically occupation, or occupations. Even if the policy has specialty language. If someone is working in a medical specialty, or a medical occupation and 100% of their income and time is derived in that, it's pretty clear cut what their occupation is. If someone is a passive investor in real estate projects and they're not tending to the day-to-day operations of it, or they have a management team in place, or it's a family business and they just invest, the occupation is going to be the medical component. Where I see things becoming complex when you're talking about occupational definitions is if I have a physician who's spending 50% of their time practicing medicine and 50% of their time doing entrepreneurial endeavors, then they really haven't limited, or focused in one occupation. They're now doing multiple things. And we do see that from time to time. But if someone is primarily generating their income through the performance of personal services from practicing medicine, being the physician is going to be the definition that carries in the policy.

Amber Stitt [00:24:31]:
Another interesting part of our world, just with technology and different opportunities to generate income. If there's a physician that's disabled, I really feel that there's probably something as long as their mind is working that they could do in the future. The reason I bring this up is sometimes I have radiologists, diagnostic radiologists, psychiatrists that say, "Hey, I can work from anywhere. Do I really need this own occupation rider?" And we look at the cost differences, it could be kind of substantial in savings. But I think having that protective layer, just in case you are sitting down in a wheelchair, speaking to a large audience, collecting a consulting fee, that's income. There's opportunities to work if our brain works outside of medicine. I think that rider is so important because we can't tell what is going to be available to us in the future from an income producing perspective. So I'm seeing you nodding your head, so you're agreeing that, "Gosh, it could be any 1099 work."

Ethan Abramowitz [00:25:28]:
I have worked with a number of radiologists and a handful of psychiatrists over the years. And the question then becomes, "Well, I can do my job from anywhere," like you're saying, "I just have to sit and look at a screen." I think what is often lost is with the clients I've worked with, specifically with radiologists, diagnostic radiologists, they will be suffering from a physical issue that affects their ability to sit for extended periods of time. Or they may have a visual impairment that comes into play that affects their ability to sit and look at a screen for extended periods of time. And it may not take them out completely, but it may cause them to have to take more frequent breaks and to step away. And then we see a decline in daily productivity in the number of reports they can review and produce in a given day.

Ethan Abramowitz [00:26:14]:
And that would put them in a partial disability scenario. We have other clients that have had to stop completely because whether it's something like Parkinson's disease, or neuromuscular degeneration where they can't sit, and then it's, "Well, what can I do?" And it's, "Well, maybe you can't sit and maintain gainful, sustained employment as a radiologist, but you can do something else like consulting at your leisure." And we do have clients that do that where when you're a radiologist, you're sent images that you need to review and get back to the treatment providers pretty quickly. But there is other consulting and expert type work out there where it's, "Hey, take a look at this when you can and give this a report when you're able." And it's something that can spread out over a few days. So they're still able to contribute, they're still able to generate an income, but they're not able to do radiology because they just can't do and stay up with the occupational demands to actually be gainfully employed.

Amber Stitt [00:27:16]:
That's so interesting, the sitting component being such a factor. That could be any one of us, I think before we wrap up the occupation definitions...

Ethan Abramowitz [00:27:25]:
Well, I think. Let me interrupt. I think you segued into a good part, which is what are the most common causes of disability and what we see, and I think what the available data shows is that 30% of disability claims are based on musculoskeletal disorders as well as orthopedic and neurological disorders. Only 10% of disability claims are the result of injuries, other causes, cancer, mental health and addiction related disorders is actually the fastest growing. Throughout the pandemic, we've seen not only the long haul Covid issues, but people struggling with mental health and substance abuse, even people that were in recovery, relapsing. That's also why we see a lot of, especially in the group policies the employer provided long-term disability policies, we'll see 24 month limitations. But then we also have heart disease and subjective claims like chronic fatigue syndrome and fibromyalgia and chronic pain.

Ethan Abramowitz [00:28:18]:
So I think that's important because what we learned when we look at what the common causes of disability, is that most of them are degenerative in nature, as we were talking about earlier.

Amber Stitt [00:28:29]:
Okay.

Ethan Abramowitz [00:28:29]:
They progress and decline over time, which highlights the importance of a partial, residual disability rider. I think it also segues into a lot of people not understanding how these medical conditions trigger the elimination period in a policy.

Amber Stitt [00:28:44]:
Because you can go back in time from the onset date. I think you told me a story working with one of your clients, that it went back quite a bit.

Ethan Abramowitz [00:28:52]:
So every time I work with a client, the first thing I do is after my intake, we gather the medical, we gather the production, we gather the financial, and we look to see is there a date back in time where the medical shows severity such that we see functional impairment that's reflected in a decline, or reduction in work capacity that then shows a loss of earnings. And I have multiple clients that I've worked with over the years where we've been able to go back 4 or 5 plus years in time recovering hundreds of thousands of dollars. I had one client that we were able to recover over $500,000 in partial disability benefits because when that client came into our office, she was only focused on a total disability claim and did not understand how her partial residual disability coverage worked. Now it's not on every claim we're able to do that, obviously. And it's very fact specific because we're then dealing with contractual components like late notice. And do we have all the medical that we need? Do we have all the financial and production? Does everything line up and actually show that someone was suffering a medical issue, that it was severe enough to affect occupation and they did have the economic loss. But even if it's not 5 years, even if it's pushing it back a month, or 2, or 3, or 4, the elimination period is the number of days you have to meet the policy definition before the benefit kicks in, before you become eligible to repay. And if it's a 90 day elimination period and someone walks in thinking that they were disabled on June 1st, and we look at it and say, "Well, you started cutting back in January, there's 6 months here."

Ethan Abramowitz [00:30:29]:
"Well, yeah, I did cut back and I was talking to my doctor but you know, I wasn't really well." And then you look at the income and you see that reduction. You're able to push it back. I think, not to get too far down the road, but the other importance is certain residual disability riders require a loss of earnings to trigger the elimination period. Others don't. It's not a one size fits all approach. Certain products have it, certain don't.

Ethan Abramowitz [00:30:52]:
Sometimes it makes sense because the other coverage is better. But with certain products they don't require, at least for the elimination period, to have a loss of earnings. But on every claim, more often than not, people aren't aware of truly when maybe they started cutting back. And again, it's not every case. But when you are able to push a claim back in time, that's more money in the claimant's pocket because you've exhausted the elimination period when it's justified.

Amber Stitt [00:31:19]:
Yeah, it sounds like you're able to help people really get through this process and just really see the whole picture so that the claims process can go as smooth as possible. I think I remember what I was about to say before. I don't work on the group contract side. I work with individuals. So I don't think people understand that if you have income and there's income flowing to your tax return, that's part of that claims process every year. And it might be with a private plan, too, but that's happening to calculate and offset your benefit. If you're solely relying on group contracts, there's usually some piece of that contract that's going to offset, or remove your benefits away from you.

Ethan Abramowitz [00:31:56]:
So that's a great point, which is group policies, the group long-term disability plans provided by employers, I've yet to see one that is a true own occupation policy. Meaning that if I can't work as an anesthesiologist, but they kept me on working in administration, or as a medical director, under group policies there's typically a disabled while working provision, or just general under the deductible source of income it'll say, "Income generated from personal services." And what that means is that if I'm working not in my occupation, there potentially, and it depends on how the policy is worded, there could be a dollar for dollar offset. If I have a $10,000 a month benefit under the LTD plan and I'm making $5,000 a month, regardless of what I was previously, and what the percentage loss is, they'll automatically cut it dollar for dollar. There are other policies that have more formulaic approaches to how it's handled. They will look at your pre-disability monthly earnings and that number and what that was. They will look at your current monthly earnings and the disability benefit and for the first 12 months or 24 months that your benefit won't be reduced as long as your current income and your gross benefit from the LTD don't exceed a higher 100% of your pre-disability monthly earnings.

Amber Stitt [00:33:14]:
Right.

Ethan Abramowitz [00:33:15]:
But then that typically changes after 12 months, or 24 months, where it's then either a dollar for dollar or a percentage loss or what we've seen is other products will have 50% of your monthly earnings and the new occupation will be deducted from your benefit. So if you have a $10,000 a month benefit and you're making $5,000 a month, they'll deduct the benefit by $2,500. So it varies and I think a lot of people see the spec page that they get, or the summary plan description for the group long-term plan and think, "Oh, this is great coverage." But those definitions and that minutiae and detail isn't spelled out clearly. And you really have to do a deep dive to truly understand the deficiencies in the group products.

Amber Stitt [00:33:59]:
Do the group contracts typically assign an attorney to that person, or are people looking for their own representation at this time?

Ethan Abramowitz [00:34:06]:
So, no company assigns an attorney to help anyone. They're hoping that the claimant will do it on their own. And the claims process is tricky, not to sit here and pat myself on the back, or minimize what people are able to do on their own. But when you're submitting a claim, the first thing you have to do is notify the company. So notice. And then once you do that, the company sends a packet to you which has the claimant statement, employer statement, attending physician statements, but they also want a laundry list of information. So it's the ability to gather all of that information, put it together in a clear and concise way and ship that off to the company.

Ethan Abramowitz [00:34:42]:
It's like tennis. The burden of proof is whose side the ball is on. What we often see happen with clients that come to us with general questions, even people that don't end up hiring me, "It's the company. The big bad insurance company isn't paying me and they're putting me through the ringer here." I'm like, "Well what's the problem?" "Well, they want my tax returns and my production records and I don't think they're entitled to it." And the response is, "They aren't entitled to it." So I've seen a Lot of potential clients and people that it's just a quick phone call. They don't understand what the company needs to process a claim.

Ethan Abramowitz [00:35:15]:
One of the things I do on my end is when someone retains me is I gather all the information that I know the company needs to process the claim. And if information is missing, whether it's financial, or production, we figure out how to supplement that one way or another, whether it's going back to the employer and saying, "Okay, we don't have production records. Can you provide an employer statement outlining the duties, time schedule, or the calendar, or whatever's needed to meet the proof of loss requirement?" Because the insured bears the burden of proof to substantiate the claim, and we get that shipped off to them. What typically happens in a claim is the physician will get the initial claim packet, they'll fill out the forms, and they get frustrated when the company starts coming back to them with questions. But they're legitimate questions, because they have to substantiate the occupation, they have to substantiate the medical. They have to substantiate loss of primary duties, if it's partial claim, they have to verify the income loss.

Amber Stitt [00:36:06]:
Because people could go on partial and then full, or back and forth depending upon recovery and what kind of treatments are there. So all of that, they're going to take that pretty seriously.

Ethan Abramowitz [00:36:16]:
I started my career as a defense attorney and now work with claimants and I'm on the other side of the dealing with insurance companies. There are a lot of good insurance companies out there. There are a lot of bad insurance companies out there. I don't generalize, but I've seen claims that I never thought would get paid, get paid simply. I've seen claims that I thought should be approved right away, where the client gets put through the wringer. And it's a fact-by-fact, case-by-case basis.

Ethan Abramowitz [00:36:40]:
But the one thing that rings true with any case I deal with, it's the proof of loss matters. The paper, the policy, the 4 corners and the coverage that the insured have is what matters and what governs. And if you've got a very good policy and you've got the facts that substantiate a claim at a certain point in time, the company will have to accept liability. When you've got a questionable claim and you're not getting appropriate care, there are other issues, then it's going to be a lot harder and they're going to do what they can to raise questions in their boxes. They're going to have to check. But the key is doing your due diligence at the beginning, making sure everything's lined up and trying to get everything ahead of time. So, "Hey company, you have it. This is everything you need.

Ethan Abramowitz [00:37:20]:
Okay, you've got a couple questions. Happy to go through that with you. Now pay the client."

Amber Stitt [00:37:24]:
I used to do contract negotiations with physicians. Part of just the indirect compensation pieces, benefits and the people that are high production, not just a base salary with W2 income. And when we were negotiating what kind of production models and when the bonuses would be reconciled, I always told people, not even talking about disability at that time, but keep track of all of this. To wrap up this episode, if there were some takeaways you could give people and you've already given a ton of gems, but what are some takeaways as people are going into practice outside of training, outside of that W2, paychecks are pretty consistent? What would be a good practice for them? I always say put things online, a cloud based almost like an office set up for yourself and keep track of things so that if you need to grab those documents, they're just available to you.

Amber Stitt [00:38:16]:
Any thoughts that would be helpful to share? Kind of the prep?

Ethan Abramowitz [00:38:20]:
I have my disability policies that I got 10 plus years ago in a file cabinet in my office at home. My wife knows where that is. She also knows where my life insurance and all the other policies are, based on what I do. I know what my policy is. I think for physicians that have a policy and they haven't sat down with you and Scott and your team and they may have gotten it somewhere else, and they have questiones. Take the policy out. If you don't have it, get a duplicate copy of it and go over it. Look at your group long-term plan from your employer.

Ethan Abramowitz [00:38:50]:
I think the other thing to note is that employer provided plans can change year-by-year. The individual policy you have, it's yours. You can increase the benefit if you have the future increase options, but the coverage doesn't modify. The only thing that happens is if you don't pay the premiums, it'll lapse. So your coverage is set in stone. It doesn't prevent you from going out and getting other policies and supplementing it if you feel like you do have a policy you're not happy with. But understand your coverage. Understand the coverage you have from your employer.

Ethan Abramowitz [00:39:18]:
I think one of the things that throws a lot of my clients off is, and we were talking about it earlier with the partial disability claims is, incomes fluctuate year to year. I'm always amazed that people don't keep track of of their annual earnings and the percentage loss or gained each year. So typically with the partial disability rider, it's a 15% or 20% loss of earnings. That's a significant loss. But what may occur is that the formula used, it's in the policy and it varies by company, but it's typically something like the following, "The greater of the 12 months immediately prior, or best two consecutive years out of three, or best two years out of five." So it's a formula and understanding that formula. But more important that if a physician is working and they're cutting back due to a medical issue and they're seeing that their income's dropping, or know that it's, they've lost maybe a bonus comp, or had to restructure their comp structure, that it may be time to dust off that policy and take a look at it and really take a look at their financials as well as their production records.

Amber Stitt [00:40:22]:
Well, Ethan, this has been wonderful. I feel like that we have to tell some of these stories to make it real because a lot of times we're transferring risk. Like you said with auto and home kind of have to do that. With the price points of these policies, it can be a little tricky to think about when is the time to do this. But we always say the earlier the better. Not so much about the cost. I mean, it's about the cost, but it's really about your health and getting a really nice offer and then not having to worry about that. So I'm hoping that listeners are going to be a little bit more proactive after listening to you and our podcast today and really trying to put some steps to be more proactive than reactive.

Amber Stitt [00:41:01]:
I always say take action today, if you can. It's not a good thing to be doing everything on the other side. So before we wrap up, where can our listeners find you if they need your help?

Ethan Abramowitz [00:41:11]:
They can look me up on the internet at: SeltzerLegal.com. They're free to call me at the office, as well, with questions and concerns. It's 215-735-4222, or they can also email me at: Ethan@SeltzerLegal.com. I'm always happy to take time and answer quick questions.

Amber Stitt [00:41:29]:
Yeah, I know that you've been helpful, too. You've helped people have a few minutes on the phone to kind of figure out what the next step is.

Ethan Abramowitz [00:41:34]:
The focus always is on making sure, especially if it's someone contemplating coverage, or pursuing a claim. 5 minutes of my time, more often than not, is able to at least provide someone with a roadmap of where to go and what they need to do, whether or not they actually need my services, or not. I'm always happy to do that.

Amber Stitt [00:41:51]:
Perfect. Well, I'll link your information in the podcast notes, too, from this episode so that that'll be easy for people to get to. And I think I'll link a couple...you have a couple white papers, as well, so that could be helpful. So I hope that everyone's enjoyed this episode and have a great day and goodbye for now.

Amber Stitt [00:42:10]:
If this episode helped you think a little more clearly about your next step, that's the goal. You don't need to have everything figured out, but you do need to take ownership and take a meaningful step forward today. Thanks for listening to The Responsible Resident. As a reminder, this podcast is for general educational purposes only. It is not legal, tax, or individualized financial advice, and coverage options will vary based on your personal situation.